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5 Tips to Save Money on Your Smartphone Bill

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When you just can’t seem to make your money last all month, something has got to give. If you’re searching for ways to cut your monthly expenses, look no further than your smartphone. A Harris Interactive survey found that almost half of Americans spend $100 or more each month on their smartphone, while 13 percent drop $200 or more on monthly phone service.

Pardon our frankness, but that’s crazy. $100-$200 a month? No, no, no. We’ll show you how to do it for cheaper.

Downgrade Your Data Plan

Check your usage statistics on your phone. If you’re only using a portion of the data you’re paying for each month, then ask your carrier if you can switch to a lighter usage plan. Use MyRatePlan.com to compare plans and find the right fit for your usage needs.

Make money from technology

Reduce Your Data Usage

This tip goes hand-in-hand with the one above; if you can’t downgrade your data plan because you use too much data, well then maybe it’s time you reduced your data usage — then you can cut back on your plan. To do this:

  • Connect to free Wi-Fi whenever possible. Of course, don’t do any online banking or send any sensitive personal or financial information, unless the site is encrypted. For more tips on using public Wi-Fi safely, visit the Federal Trade Commission website.
  • Don’t stream video, play games or use apps unless you’re connected to Wi-Fi. These activities suck up a lot of data.
  • Make sure you’ve killed your apps when you’re done using them. If you don’t, they’ll continue to run in the background, using data.
  • Don’t run apps that regularly push content, such as weather updates and sports scores. These use data continuously. If you need help turning these off, simply search “How to turn off push notifications on a (your device)” and follow the instructions.

 

Change Your Insurance Plan

Many people don’t realize that they aren’t limited to the insurance offered at the time they bought the phone or signed up for service. Insurance from the manufacturer or carrier is usually more expensive than going through a third-party provider. Protect Your Bubble offers smartphone protection starting at $5.99 a month. It covers liquid damage, cracked screens and mechanical breakdowns, and most deductibles are just $50.

You can take your chances and cancel your insurance altogether — that will save you money. But then you take the chance of having to shell out up to several hundred dollars for repair or replacement if something happens. That’s not good for your monthly budget, either.

Go With a Prepaid Plan

Prepaid, no-contract plans are a good way to reduce your bill, and a lot of them have come down in price in recent months. Walmart’s Straight Talk plan has an unlimited talk, text and data plan for $45 a month; Cricket Wireless and Boost Mobile have similar plans for $50 a month; and the GoPhone offers the same type of plan for $60.

There are some caveats here, however. Make sure to ask about coverage, overages and the available selection of smartphones. Consumer Reports features a comprehensive guide to no-contract phones and plans.

Stop Buying Stuff

Finally, quit downloading apps, games, music and the like. Ninety-nine cents here and there isn’t much, but it does add up. If you need a little help with willpower, turn off your ability to make in-app purchases.

3 Smart Things 20-Somethings Can Do With a Tax Refund

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Unless you left with an accounting degree, filing your first tax return after college can be a little deceiving. A couple government checks in the mail this summer might feel like a consolation prize for a dues-paying job, and you deserve to be king for a day, right?

Hold on a minute. We have a few ways you 20-somethings can make the best use of your tax refund.

Perhaps the Most Underrated: Start Saving

If you get your refund deposited directly in your bank account, it’ll just “show up” one day, like someone just dropped a gift card in your lap. Saving isn’t the most appealing option, but it will be the most rewarding when it’s time to rent a new apartment or put a deposit down on a car. Building your current account isn’t always enough incentive, so here are two ways to keep at it:

  • Open a savings account. Already have one? Open another. A hundred dollars buys you a reason to put disposable income aside exclusively for emergencies or other big (but necessary) expenses.
  • U.S. savings bonds are another convenient option, allowing you to redirect your tax return into an account that earns ample interest and is safe from inflation. According to TreasuryDirect, classified Series I bonds opened just four years ago this month, and this route requires a simple request via IRS form 8888.

Invest It in Your Retirement

Start building an investment portfolio now. If you feel you don’t have the know-how to purchase stock, the following two retirement investments are ripe alternatives for someone your age. Planning for retirement should always start as early as possible.Woman and piggy bank

  • Open an IRA, or individual retirement account. This is a personal account you contribute to each year, and the amount you contribute is tax-deductible. While you have more freedom to adjust and personalize investments like stocks, mutual funds and CDs, you can’t make withdrawals. With a Roth IRA, on the other hand, you pay taxes upfront and then you can make tax-free withdrawals.
  • Invest in a company-sponsored 401(k). Don’t miss out on the retirement plan your company offers. Many companies use a safe harbor or match plan. Safe harbor means that if your company contributes to your plan, the funds are yours even if you leave the company a couple months later. A matching plan means the company matches whatever you put into the plan. Some companies will even match up to 6 percent of your salary, according to DailyWorth.com. It’s basically free money.

Pay off Your School Loans

If you owe on student loans, put your refund on that debt. Paying off loans isn’t optional—you have to find a way to pay them anyway—and paying up front and on time is a bigger deal than you might think.

Funding your next bill with a tax return reinforces your credit history, yielding low interest rates on future big-ticket items like a new car, and keeps you paying loan interest at levels that can qualify you for education-based deductions as defined by the IRS later on. Whenever you can contribute a large chunk of money to paying down your student loan debt, do it—whether it comes from your tax refund, an unexpected financial windfall such as lottery winnings or inheritance or selling a structured settlement. The faster you pay them off the more you’ll save on interest, and that’s like money in the bank.

7 Killer Personal Finance Lessons to Go From Couch Potato to IRONMAN

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Humans by nature have a competitive drive that compels them to succeed. Great athletes are committed to their training because they want to be the best, and anything less than a championship isn’t enough.

If you’re not an athlete, this urge to prove yourself often manifests itself in the car you drive or the house you live in. But to properly manage your money, you need the dedication of a pro athlete to train your mind and create winning habits.

But if you’re the financial equivalent of a couch potato, you can’t expect to become an IRONMAN overnight. You need to start from where you are and create a plan that works for you.

How to Get Startedpersonal finance ironman the free financial advisor

To reach your personal finance goals, you need to train your mind to stay within a specific budget and have the commitment to stick to your goals. Here are four steps you can take to prepare for the marathon of personal finance:

1.     Put your goals in writing. Many athletes have their team to hold them accountable, but since personal finance is usually a solo venture, writing down your goals can help. Maybe you just want to be debt-free by a certain date, or perhaps you’re trying to save a specific amount for retirement.

When setting goals, it’s important to be specific and realistic about how much of your income you’ll be able to save or put toward paying off your credit card each month.

If you’re thinking of buying a new home or a nice car, do some research to figure out exactly how much it’s going to cost. (This includes taxes, insurance, maintenance, etc.) Don’t leave anything out! Give yourself some cushion in your financial planning for times when unforeseen expenditures interfere with your plans.

2.     Assess where you are compared to where you want to be. World-class runners always know the race times they want to achieve, and they train with that goal in mind. Once you’ve listed your current expenses and goals, brainstorm possible ways to cut spending to reach your ideal financial situation. Where are you now compared to where you want to be?

3.     Consider possible ways to increase your income. Evaluate how a second job, a promotion at your current job, or furthering your education could help you reach your personal finance goals. Carefully evaluate whether the income generated from these options will be worth your time and investment.

4.     Put your plan into action. No matter what level you’re at, you’ve got to start somewhere. For Rocky, it was just a matter of getting out of bed, putting on his sweats and sneakers, and training before the sun rose. Put your routine into action, and stay committed — even if your plan falters from time to time.

3 Lessons for Winning in Finance

Once you put your plan into action, it’s important to maintain a winning mindset. It takes many athletes up to eight years of training to make an Olympic team, so it’s crucial to have the tools in place to maintain motivation.

 1.     Remember: Financial success is a marathon, not a sprint. Most athletes will tell you that a slice of cake once a month isn’t going to kill you. But if you indulge in a slice every other day, it starts to become detrimental. The same rule of moderation in the long haul applies to amassing wealth.

To remain financially healthy, you need to develop the foresight to see how unnecessary expenditures can derail your financial goals in the long term. It’s OK to treat yourself every once in a while, but those weekly shopping sprees and daily lattes add up. Reaching your personal finance goals is an exercise in patience and long-term dedication.

2.     Winners never quit, and quitters never win. You’ve heard this one before, right? Even the best experience failure, but how well you bounce back from setbacks and learn from them ultimately determines whether you reach your goals.

“I’ve missed more than 9,000 shots in my career,” said Michael Jordan. “I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over again in my life. And that is why I succeed.”

Don’t use your failures as an excuse to put your dreams on hold. Just get back on track, and keep moving forward.

3.     There’s no “I” in team. Tim Rees asked nearly 200 elite golfers about their support systems. He found that during stressful matches, golfers with strong support systems performed better than those without. Similarly, your spouse and loved ones can be huge sources of support and motivation in your financial journey. Make sure your family understands your goals and is committed to helping you reach them.

Just as athletes don’t expect to win every single game, you shouldn’t expect to become a millionaire overnight. The road to financial success is a rocky one, and life will throw you unexpected curveballs. The key is a consistent, long-term commitment to saving and spending wisely. If you can do that, you’ll retire with plenty of wins under your belt.

Daniel Wesley is the founder of DebtConsolidation.com, a website that specializes in debt-relief services for businesses and individuals.

Photo: Patrick Theander

Save Money: 4 Items To Buy Online

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Online Purchases
According to the Economic Policy Institute, the average family budget for a two-parent and two-child family runs $48,166 in Marshall County, Mississippi, to $94,676 in New York City. Meanwhile, costs like childcare in Washington D.C. for just one child run $1,318. The institute found even in solid economic conditions, low-wage jobs would not cover basic family needs. Annual wages for a full-time minimum wage worker run $15,080 which makes it difficult, if not impossible, to live in even an inexpensive area.

While you may not be able to control the cost of living in your area or your wages, there are ways you can save money. Shop online for often overlooked necessities like groceries and eyeglasses, and dramatically slash your budget. Here’s a look at items you should always buy online to beat brick and mortar stores at their own game.

Groceries

A weekly grocery bill for an average family of four runs about $200, according to the USDA Center for Nutrition Policy and Promotion. Spending just short of $800 a month just on groceries is a serious budget breaker. Trim your costs by buying groceries online with sites like Amazon or Walmart. Amazon offers a subscription service where you can sign-up to receive orders on everything from paper towels to cereal to arrive at a set date and time of your choosing. Aside from convenience, signing up for a subscription can lower your order costs.

Walmart offers a wide range of products and brands like Betty Crocker and Campbell’s at prices that will beat most competitors. You’ll also get free shipping on orders of $50 or more and save yourself the time and trouble of dragging the kids to the grocery store and unloading when you get home.

Eyeglasses

Shopping for new frames at your eye doctors could cost hundreds of dollars for a designer brand. Even discount eyewear retailers like LensCrafters will usually charge around $100 for glasses. Meanwhile, sites like ZenniOptical.com offer prescription frames starting at just $6.95 for men, women and children. The lower cost means less stress over picking out frames and even keeping a back-up on hand for active kids prone to breaking their eyewear. The downside is returns can be tricky with Zenni only offering 50 percent of the value upon return.

Tires

It can be intimidating to order tires online and know what to do once you hit “buy.” But online retailers can take care of all the logistics for you. Such retailers can connect you with recommended tire shops to install them. Tires are shipped for free and arrive fast so you can get up and running quickly. Online tire outlets are also likely to offer ongoing promotions and discounts to save you even more money than walking into a store.

Electronics

Skip the high pressure from salesmen and order electronics online at a discount. Shop online for electronics from stores like Costco and BJ’s Wholesale. You will need to buy a membership at $55 or more a year just to shop, but the savings can still add up. If you don’t care about name brands, buy the generic house brand instead. Wholesale retailers are also likely to carry Sony TVs next to affordable Vizio flat screens for hundreds of dollars less. Costco in particular is great, their customer service is fantastic and their return policy is first rate.

5 Apps To Simplify Your Finances

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Online chartOnly 30 percent of Americans prepare a long-term financial plan including investment goals, states a poll by Gallup. That means 70 percent of people are figuring out their financial plans as they go and hoping the numbers add up somewhere along the way. If you want to be part of the 30 percent, there are ways to simplify the financial planning process from paying bills to knowing where to invest. Take the tedium out of creating a budget and savings plan by downloading a few apps to your smartphone to put you on the right track.

Mint

Simplify your banking and savings accounts, investments, credit cards and loans by having them all in one place. With Mint you can set up your accounts and get an easy-to-read, simplified graph to show how much you’re spending and where. Mint also lets you design a budget, and it will alert you when you’ve gone over or when you’re getting close. It is ideal for those working towards a financial goal like paying off a credit card or a trip abroad because it allows you to set a plan and watch your progress. Seeing how close you’re getting also can help motivate you to push harder towards your finish line.

LikeFolio

Don’t let the overwhelming amount of investment advice stop you from taking action. LikeFolio figures out which companies you and your friends like and talk about most so you can invest in them. The idea is that you should invest in companies you already know and love. LikeFolio pours through your social media status updates for any mentions of brands and products, and then helps give you more information for your potential investments.

Expensify

Expensify is for anyone who hates expense reports and wants to streamline the process. It’s free to upload or email an unlimited amount of receipts, and it allows you to quickly add cash expenses and import your credit and debit card transactions. You also can add mileage, time and other billable expenses as needed. Use their SmartScan process to help separate receipts and type out the following information on your behalf. It shows the merchant name, transaction date and amount. The first month is free, and $5 per month after that.

Check

Pay all your bills in one place with the free app called Check. Get instant alerts for upcoming bills, finance charges and other financial activity. It takes a little time to set-up all of your accounts, but once it’s set, Check does all the work for you. When bills are due, simply log in on your smartphone or other device and pay quickly and safely. The app promises bank-level security and real time alerts so you can monitor large expenses and deposits.

Wally

This highly intuitive app makes financial management easy with a 360 degree view of your money. Wally consistently gets rave reviews for its simple interface, which is both pleasant to look at and use. Get a glimpse of all your activity from spending to savings while Wally helps you figure out where your money is going. Like Expensify, Wally also has an InstaScan feature to scan a receipt for an expense report or your own records.

5 Mistakes I Made Building My Business

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I don’t know if I’ve told my first business story on here. I owned a disc jockey company for ten years.

That was where I learned how to do everything wrong.

Sometimes, getting it wrong is okay, as I wrote recently on my personal blog, Stacking Benjamins. (Read: Messing Things Up? So Am I….And I Like It).

But it took lots of mistakes for me to learn. The problem was that I was hard-headed and didn’t change quickly enough. Over the years of being a business owner I’ve learned a few things:

1)   I didn’t change directions quickly enough. Often I’d make changes only after someone told me several times they didn’t like something. I always treated the first person who told me they didn’t like something as an outlier. Now I treat the first person who tells me they have a problem as honest and forthcoming, something I’m learning most people aren’t when it comes to telling businesses what they love or dislike. (I love this piece at CreditUnions.com: Change Before You Have To, Or….Change NOW)

2)   I borrowed too much money and from the wrong places. When I was behind on my bills and chasing money, I didn’t pay enough attention to the terms of the loan or the interest rate. I just knew that I was in a cash crunch and needed money fast. Big mistake. That one cost me that original business and probably made it so I had

3)   I didn’t have a repayment plan. Whether it was for installment loans, credit cards, or otherwise, I didn’t have enough foresight or business knowledge to focus on cash flow and what bite that loan was going to take out of my hide. Instead, I’d have rosy projections in my head. Then, when something didn’t happen the way I’d hoped, I’d be behind the eight ball, hoping to get out of trouble.

4)   I didn’t focus on keeping overhead low. I had a storage unit, a truck, hired DJs and gave them paid training sessions that were goofy, fun and expensive. I dreamed about “company outings” that were lavish and celebrated the fact that we were awesome at our jobs. All of this cost me money that I couldn’t afford. I should have been much more frugal about the entire operation.

To some degree, I still am not frugal with my operation. I spend money on professional products….but only those that’ll help me get ahead faster. Different than in the past, those products I’ve already tested for to make sure that I really need them. In the next month, I’ll be purchasing Scrivener (to complete my book), a pre-amp for our podcast operation (Stacking Benjamins), and arms to hold microphones for OG and I. (If you saw “the basement” (my office), you’d know how important this last one really is).

5)   I didn’t learn the basics of building or running a quality business. Sure, I read lots of magazines like Success and Inc., but I focused on the “fun” areas like creativity in business and having a fresh, new take on business than on how to build a stable, well-honed operation. It wasn’t until I read the E-Myth many years later that I saw the sexiness of having a straightforward, well-oiled machine.

Last summer I wrote about the magical company Cherry Republic. What I find fascinating about that firm is that, to the outside observer, they have all of the customer service in place that I loved when I began my business, yet they had the marketing and operational support to make this a reality instead of a cheap pipe dream like my disc jockey company.

What I Learned? Start With The Fundamentals

My view of how a quality business is built has changed dramatically over the years. I’m much more inclined to rely on systems and on smart business practices than I am on the sexiness of just customer experience and low prices. It isn’t that price and experience aren’t important. On the contrary, I only think that you can have a great experience and a good price point if the basic building blocks of your operation are sound.

Money-Saving Tips to Help You Live Like Royalty (or Close to It)

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The perfect accessory to any outfit is an overstuffed wallet. And we don’t mean a receipt-crammed pocketbook, either. If your charmed lifestyle is siphoning just about all of your paycheck, it’s time for a change. Don’t worry, no penny-pinching required here—just a few smart financial adjustments. You can have your stilettos and matching handbag, too.

Take Control of Your Household Bills

Pat yourself on the back for setting up those monthly automatic payments. But, if you’re relying on the “set it and forget it” method, you could be losing money on miscellaneous fees or account errors. Start by taking a thorough look at your itemized bills. With highlighter in hand, mark any miscellaneous monthly charges and usage fees. Then use these tips to remove them and negotiate reduced payments.

  • Cable and Internet: If you bundle services and pay your bills on time, the ball is in your court. Use your customer loyalty as leverage for lower rates. Do your homework and familiarize yourself with competitor offerings. Make mention of the savings you could gain by switching providers. Customer service-minded companies do what it takes to keep valued customers. If not, make the switch.
  • Cell phone: Even if you’re locked in to a mobile contract, you can still shave a few dollars off your bill. Take a few moments to understand your contract. What does your mobile package encompass? Are you paying for 6 GB of data when you only use 3 GB? Lowering your data package can save between $10-$20 per month. Does your plan include unlimited text messaging, or are you paying a bundle in overage fees? Look at your usage history to decide whether to reduce your monthly usage or increase your plan and save on overage fees.
  • Auto insurance: Don’t overpay for car insurance. Try The Hartford’s auto insurance calculator to shop for the best deal. Answer a few short questions, and the site provides you with the best options to fit your budget and lifestyle.

Create a Spending Plan

Now that you’ve negotiated your way to extra savings, how will you allocate your new-found cash? Forget budgeting; this isn’t a course on deprivation. It’s about making the most of your hard-earned dollars, so you can enjoy a well-lived present while preparing for a sound future. Have you been eyeing that new Kate Spade handbag, those stunning Michael Kors heels? You can make them yours. Visit LearnVest’s Money Center to determine your financial priorities, set goals and track your progress. Find out what stays (haute couture) and what goes (perhaps your daily coffee run?).

smart shopping at TheFreeFinancialAdvisor.com

Shop Smarter

You’re strong, successful and independent. But when it comes to the latest shiny object, you’re a deer in the headlights. Even the most headstrong females can fall victim to the overpriced trends. Your smartphone provides much-needed guidance to save you from making rash decisions. Download the ShopSavvy app and never overpay on the items you love again. Use the barcode scanner on any product you have your eye on, and the app delivers a list of stores that carry the item. You’ll also see the price points available (both online and in-store) to ensure the best deal possible.

Suing Your Parents for College Money? 5 Reasons I’m All For It

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Today in New Jersey an 18 year old is suing her parents for college money. According to USA Today, she says that they issued her an ultimatum (ditch the boyfriend or get out). Dad says they asked her to follow a few house rules.

Whatever. I think this is an awesome exercise.

Partially, I like this lawsuit because I think entertaining me (no matter what it means to the court system) is a great idea. But there are many BETTER reasons:

1) Blaming Someone Else For Your Problems Is Often the Best Solution. This idea of “trying to solve your problems through listening and compromise” is complete baloney. Take a page out of Washington’s book and adopt this slogan: My Way or the Highway.

This plays into any financial decision, doesn’t it? I met with a client during the 2000 market collapse with a young advisor. The client was agitated because the market was collapsing and she wanted someone to blame. The advisor continually tried to reconfirm the strategy that they were using, but the client would hear none of it. “I don’t care what the strategy is. I just want my money back.”

I felt for the woman. Clearly, understanding your strategy is overrated. It isn’t about the world….it’s all about you.

2) Rules Are For Suckers. If you lose money in the stock market you should sue your broker. If McDonalds only gives you one napkin, sue them. I should have sued J Crew for my horrible shopping experience. If your parents won’t pay for college, then tell it to a judge.

I have no sympathy for this guy. Sure, it’s his home, but what about her rights? If she has a boyfriend that dad doesn’t like, why shouldn’t he let her bring him home? In fact, why doesn’t he just pony up for them to live in a hotel? That’s what she SHOULD be suing for….a nice hotel stay.

teen sues parents for college money in New Jersey

I think the judge should throw this giant gavel at the dad. Teach him a lesson!

3) It’s Not Your Fault You’re Young And Smart. This girl, according to sources, has a $20,000 scholarship and wants to go to school out of state to Vermont. Does it really matter that $20,000 probably doesn’t come close to covering out of state tuition costs? Not to me, it doesn’t. I think she’s completely entitled to whatever education level she desires, if only because she wants it. I don’t care if there are less expensive options. I really don’t care if this is a logical choice at all. If the girl wants it, she should have it.

4) Dad Had A College Fund And It’s For Her. Does it really matter that a 529 plan is in a parent’s name? If dad (or in this case let’s just call him “daddy”) set aside money, it should be the girls. Daddy should waive his right to dole this money out as he sees fit. It doesn’t matter that he earned it. It doesn’t really matter that he probably took all the risk in investing the money, does it?

5) Nobody, AND I MEAN NOBODY, Puts Baby in a Corner.

Do we need more reasons this is a great idea?

Photo: Sam Howzit

5 Ways to Turn Your Budget Into a Hot, Soapy Dream

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Ah, the budget.

While I dream about hot, soapy fun, I’m not sure that “a budget” is what I had in mind. Sure, I’m into crazy stuff as much as the next guy, but this whole budget and soap thing….I thought, “I’ll pass.”

…until I was recently looking at my dishwasher.

Then I thought, “I’ll pass….out! This is awesome!”

Here’s hot, soapy, and the key to my biggest budget dreams of all time.

When I want to get stuff done….you know, real stuff, like washing dishes or clothes, I don’t do the job by hand. I throw in a few ingredients and let a machine handle it.

People tell me that they like to budget by hand. I don’t get it. I could wash my clothes by hand. They’ll probably smell a little and I’m fairly certain I won’t do a wonderful job….but I could do it.

Automatic Savings like a dishwasher - The Free Financial Advisor

Instead I just press a button.

I’ve got better things to do than sit around and worry about how I’m spending every penny. I could be playing video games, running, or working on writing an article about budgeting…..(how META!)

Instead, try these ways to create the automatic thrills of a budget lifetime:

1) Soak in your expenses without writing stuff down. Ummm….how unbelievably wild and crazy. Using a system like Mint or YNAB instead of writing out every expense? Oh la la.

2) Wash down easy purchases automatically by avoiding the store. I’ve been using Amazon’s Subscribe and Save for some time now for basic household expenses. Not only do I get great prices, but I know what a large portion of my grocery budget is going to be before the month begins. This also saves me time at the grocery store, so I can spend more time writing crazy dishwasher/budget analogies.

3) Rinse yourself in free, credit protecting services. Afraid you’ll damage your credit by missing payments on your credit card? Ask your lender about automatic minimum payments. Sure, you want to stay ahead of the game, but if you accidentally overlook a payment, you’ll keep your credit intact. …and nothing is sexier than a perfect credit score.

4) Spin your investments by reinvesting dividends. I swoon when people start talking to me about dividends. Is it getting hot in here? Until you’re ready to start spending your fortune, use the power of automatic dividends to build your savings quickly, and better yet….without paying attention.

5) Dry out any rough investments by scheduling alerts when your funds drop more than your risk tolerance can stand. Who wants to worry about the financial markets? Well, I do, if there’s something to worry about. Here’s a plan: use alerts to tell you when there’s something you should pay attention to. Until then, spend your days sprinkling rose pedals across your bed and singing horrible love songs. Or not.

Aren’t those sexy? I know what you’re thinking. “How can I get more of these tips, but on my mp3 player or phone?” Check out the Stacking Benjamins podcast every Monday or our single-interview Short Stack on Fridays for more overwraught analogies…..

My brother just sent me this hilarious SNL Amazon.com skit video….talk about hot, soapy dream! 🙂

Taxes Suck! 7 Ways to Stick It To Uncle Sam

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Let’s admit it: everyone wants a lower tax bill.

Well, everyone wants the combo of mo’ money AND a lower tax bill.

Doesn’t that sound like a “have your cake and eat it, too” scenario?

Maybe. But then again….maybe not.

Too many people pay WAY too much money on their tax bill. Sometimes they pay more because of poor decisions, but often it’s just because they don’t understand how taxes work and where to look for awesome opportunities.

Here are seven of our favorites:

Do you work for the man? Try these:

Open a retirement plan and use it. The #1 way to grow your net worth and help your tax return is to stuff money into your retirement plan at work. If you’re eligible for a 401k, 403b or 457 plan, jump on that opportunity.

I’ve heard many “reasons” people don’t invest in their workplace plan. Here are a few:

I can’t afford it. Ask yourself this: how will I afford to retire when I have no money later. If you’re too poor to save now, what will you do if you can’t work later?

I don’t like my work, so I don’t want to put money in the 401k plan. Your work farms out the administration of the 401k plan to professionals. Use your workplace plan.

They don’t match. Matching contributions by your employer are gravy on top of an awesome tax shelter. Don’t worry about the match….get invested.

Take advantage of workplace pretax plans: Besides the retirement plan, there are other opportunities, such as HSA accounts. Some companies allow you to pay for everything from childcare to optical with a health spending account. Use as much of this as possible to score huge savings on these services. (If you’re in the 25% tax bracket and have a 5% state tax, you’ll save 30% on your childcare!)

Use bonuses and incentives wisely:

It’s a great day if you’re getting a stock award or bonus, but make sure you understand what you’re getting into tax-wise carefully:

Stock options or stock purchase plan: You’ll pay taxes on these plans when you sell. Having a tough year tax-wise? Don’t sell today. There’s also a HUGE difference between short term and long term capital gains rates. Wait until you’re paying the (significantly lower) long term rate before selling.

Bonus money: If you’re eligible for a big bonus but this isn’t a good year to sell, ask your boss if you can defer your bonus until the new year. Or, if you feel that your income will stay consistent, ask if you can break up a big bonus into two even halves to lower the tax impact. This strategy is best used if you’re getting a bonus at year-end (I hate deferring money in my pocket for several months….).

Have a budget? Try these:

Give to charities. Not only are you helping your community, but you’re putting money back in your pocket if you itemize. Cash gifts will obviously lower the amount of money you have overall, but gifts in kind, such as clothing, old automobiles, and items to 501c thrift stores can both lower your tax bill and remove clutter.

An increasing number of people are now donating larger items and receiving sizable tax deductions as a result. For example, if you have an old boat that you no longer use, making a sponsored boat donation could help you to save a significant amount on your taxes.

Donating a boat is a great thing to do on a number of levels, since the boat is then sold at auction with the proceeds going to charity. Then, for your donation, you receive a tax deduction that is equal to the value of the boat or the boat’s true value.

Claim ALL of your refinance costs. If you’re FINALLY taking advantage of low interest rates to refinance, remember that any points or closing costs you pay might be deductible also. Ask your tax preparer or read this IRS notice to see if you qualify.

Investments? Here are some:

Think about your dividends. I love dividends as much as the next guy, but a portfolio full of dividend-paying stocks in a non-qualified account can be a huge tax speed bump on your investment returns. If you aren’t spending the dividends today, purchase dividend-heavy investments inside of your IRA and use your non-IRA account to house more tax efficient investments.

Buy/sell creatively. If you’re finally selling your big winning stock, look for that stock in your closet that’s been horrible and has no prospects of coming back. You can cover up all of your capital gains with losses from losing stocks…and $3,000 more.

Photo: DonkeyHotey